After the moving party makes a properly supported motion, the non-moving party has the burden of presenting specific facts showing that contradiction is possible. British Airways Board v. Boeing Co., 585 F.2d 946, 950-52 (9th Cir. 1978). It is not enough for the non-moving party to point to the mere allegations or denials contained in the pleadings. Instead, it must set forth, by affidavit or other admissible evidence, specific facts demonstrating the existence of an actual issue for trial. The evidence must be more than a mere "scintilla" of evidence; the non-moving party must show that the trier of fact could reasonably find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Summary judgment may be granted "if the evidence is merely colorable ... or is not significantly probative." Eisenberg v. Insurance Co. of North America, 815 F.2d 1285, 1288 (9th Cir. 1987). In reviewing a motion for summary judgment, the Court must take the non-movant's evidence as true and all inferences are to be drawn in the light most favorable to the non-movant. Id. at 1289. It is with this standard in mind that the Court reviews both defendants' motions for summary judgment.

The Court finds that neither case applies here. In International Knights of Wine, 110 Cal. App. 3d 1001, 168 Cal. Rptr. 301, plaintiff purchased bottles of wine which were damaged when metal caps sealing the bottles corroded and damaged the wine. There, the damage was to the wine, a product separate and apart from the defective caps. In Gherna, 246 Cal. App. 2d 639, 55 Cal. Rptr. 94, a fire in an automobile engine resulted from an unknown cause. The court reversed a nonsuit as to strict liability, finding that there was conflicting evidence on how the plaintiff had used the car. Id. at 650. The Gherna court did not address or decide whether defective wiring or transmission fluid, which may have caused the fire, were separate products from the car.

But regardless of the holding of these cases, neither assists plaintiff here. The complaint alleges "that the pipeline "was delaminated and corroded, and exposed to the risk of leakage." Complaint at P 27. Id. at P 37. Thus, the coal tar enamel lined pipe at issue here is one product: coal tar enamel lined pipe, as is clear from plaintiff's complaint, and not, as plaintiff now alleges without any supporting evidence, two products consisting of coal tar enamel lining and pipe. The fact that the pipe may have both a metal component and a lining component does not mean that it is two separate products. For instance, the United States Supreme Court addressed whether a shipbuilder could recover in strict liability from a manufacture who designed turbines when the turbines were defectively designed and manufactured. East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986). In holding that strict liability did not apply, the Court in that case looked to whether the shipbuilder had alleged property damage or economic damage when it alleged the turbines were defectively designed and manufactured. The Court held:

In the traditional "property damage" cases, the defective product damages other property. In this case, there was no damage to "other" property. Rather, ... each supertanker's defectively designed turbine components damaged only the turbine itself. Since each turbine was supplied by Delaval as an integrated package, each is properly regarded as a single unit. "Since all but the very simplest of machines have component parts, [a contrary] holding would require a finding of 'property damage' in virtually every case where a product damages itself. Such a holding would eliminate the distinction between warranty and strict products liability."

Id. at 867. (Citations omitted.)

Here, defendant Northwest has manufactured and defendant Foster has supplied a single produce of coal tar enamel lined pipe. Plaintiff has alleged that the defectively lined pipe has damaged the pipe. The defect has not damaged any separate property, such as a valve or other component of the pipeline, nor has it injured real property, nor has it destroyed or harmed personal property outside of the pipe itself. Instead, the damage and the defect are the same.

This conclusion is bolstered by the damages sought by plaintiff. The complaint alleges that "the pipe is damaged in that it became, and is becoming, corroded, and that corrosion will, if not repaired, result in leakage of sewage and consequent personal injury and property damage." Complaint at P 37. The complaint further alleges that "the costs of repairing and/or replacing" the pipe is between $ 10 million and $ 30 million. Id. at PP 29, 39. First, the costs of repair and replacement are traditionally considered to be economic damages. Sacramento Regional Transit, 158 Cal. App. 3d at 294. Second, plaintiff's Prayer for Relief seeks as compensatory damages $ 30 million, precisely the upper boundary of its estimated cost of repair and/or replacement. Thus, the complaint has alleged damage to the pipe itself and seeks economic damages for the cost of repair or replacement.

Accordingly, the Court finds that plaintiff has alleged only economic damage and not property damage. The Court next turns to the question of whether purely economic damages are available to plaintiff.

C. Economic Damages for Strict Liability

The parties agree that in California, "purely economic damages" are not recoverable in strict liability. Seely v. White Motor Co., 63 Cal. 2d 9, 45 Cal. Rptr. 17, 403 P.2d 145 (1965). See Plaintiff's Opp. at 3. In Seely, the California Supreme Court held that a manufacturer is generally not liable for commercial losses due to a defective property under a theory of strict liability. The Seely court reasoned that the doctrine of strict liability in tort was designed to govern the distinct problem of physical injuries, not to undermine the warranty provisions of the Uniform Commercial Code ("UCC"). Id. at 15. In Seely, the court held that damages arising out of plaintiff's inability to use a malfunctioning truck for his business were not recoverable in tort, but could only be recovered under an express warranty theory. Id.

Here, because plaintiff has alleged only economic damages, summary judgment on plaintiff's claim for strict liability must be granted in favor of defendants in accordance with the long-standing Seely rule.
*fn3"

In Seely, the California Supreme Court held that purely economic damages are unavailable in strict liability. Seely, 63 Cal. 2d at 15. In dicta, the Seely court noted "even in actions for negligence, a manufacturer's liability is limited to damages for physical injuries and there is no recovery for economic loss alone." Id. at 18. A number of courts applying California law have followed Seely in barring recovery of purely economic damages in negligence cases. For instance, an appellate court affirmed the dismissal of plaintiff's negligence claim when plaintiff's damages were economic damages resulting from the cost of repairing defective trucks. Sacramento Regional Transit, 158 Cal. App. 3d at 294. See also, Anthony v. Kelsey-Hayes, 25 Cal. App. 3d at 447 ("In actions bottomed on negligence, there is no recovery against a manufacturer for economic loss alone."); S.M. Wilson & Co. v. Smith Intern., Inc., 587 F.2d 1363, 1376 (9th Cir. 1978) (affirming dismissal of negligence counts and limiting parties' rights to those provided in the UCC.); Frank M. Booth, 754 F. Supp. 1441, 1449 (E.D. Cal. 1991) (dismissing negligence claim when only economic damages were alleged).

The Seely Court's reasoning has also been adopted by the United States Supreme Court in the admiralty context. East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986). In East River, the Court held "we adopt an approach similar to Seely and hold that a manufacturer in a commercial relationship has no duty under either a negligence or strict products-liability theory to prevent a product from injuring itself." Id. at 871.

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